<PAGE>
[graphic omitted]
COLONIAL GLOBAL EQUITY FUND ANNUAL REPORT
OCTOBER 31, 1999
<PAGE>
TABLE OF CONTENTS
1 HIGHLIGHTS
2 PORTFOLIO MANAGER'S REPORT
4 PERFORMANCE INFORMATION
6 PORTFOLIO OF INVESTMENTS
9 FINANCIAL STATEMENTS
11 NOTES TO FINANCIAL STATEMENTS
14 FINANCIAL HIGHLIGHTS
-------------------------------
NOT FDIC May Lose Value
Insured No Bank Guarantee
-------------------------------
- -------------------
PRESIDENT'S MESSAGE
- -------------------
[photo of Stephen E. Gibson]
Dear Shareholder:
The Fund's fiscal year began with domestic economic strength, signs of firming
foreign economies and concerns about inflation. Although inflation remains tame
and fears have calmed, there have been signs of potential inflationary forces.
Commodity prices and raw materials have been strong, manufacturing seems healthy
and consumer spending remains robust. In an attempt to keep the economy and
inflation in check, the Federal Reserve Board (Fed) raised short-term interest
rates by one-quarter point in June, August and again in November -- negating the
three rate cuts last fall.
Toward the end of this 12-month period, the broader stock market took on
strength, particularly in the technology sector. International economies showed
strengthening earnings momentum and little inflation risk. The big question
remained how long the U.S. economy could continue to grow without triggering
increased inflation.
Colonial Global Equity Fund has faced challenges such as recession and currency
devaluation in many emerging world markets since 1997. The manager has had to
switch from defense to offense in many markets, industries and sectors. While
the Fund's defensive stance early in this period dampened total return, we
believe that the Fund is now better positioned for the current investment
environment. The manager will continue to emphasize broad country and sector
diversification, while pursuing investments in select markets that appear poised
for future growth.
The following report provides more specific information about your Fund's
performance and investment strategy during the period. As always, we thank you
for choosing Colonial Global Equity Fund and for giving us the opportunity to
serve your investment needs.
Sincerely,
/s/ Stephen E. Gibson
Stephen E. Gibson
President
December 13, 1999
<PAGE>
Because economic and market trends change frequently, there can be no assurance
that the trends described in this report will continue or come to pass.
- ----------
HIGHLIGHTS
- ----------
o MIXED RESULTS FOR STOCK MARKET INVESTORS.
Although many of the major indexes delivered another year of 20% plus
performance, a few large stocks drove the average stock price on the New
York Stock Exchange down 20% during the year.
o VALUE STOCKS REBOUNDED IN THE SPRING.
Strong domestic growth and improving overseas economies triggered a
broadening of the market, as investors focused on fundamentals. Sectors like
energy, basic materials, capital goods and consumer cyclicals rebounded in
response to stronger-than-expected economic growth worldwide.
o PORTFOLIO REPOSITIONED FOR FUTURE GROWTH.
Fund performance was dampened during the early part of 1999 due to its
defensive stance. Based on the strengthening of select markets and sectors,
such as emerging markets and cyclical industries, we made some significant
changes to the portfolio. We reallocated our country and industry weightings
in order to better position the Fund in the current economic environment.
PERFORMANCE OF THE BENCHMARKS FOR THE MARKETS
IN WHICH THE FUND INVESTS 11/1/98 - 10/31/99
MORGAN STANLEY CAPITAL INTERNATIONAL WORLD (GDP) INDEX 26.79%
S&P 500 INDEX 25.66%
The Standard & Poor's 500 Index is an unmanaged index that tracks the
performance of 500 widely held, large-capitalization U.S. stocks. The Morgan
Stanley Capital International World (GDP) Index is an unmanaged index that
tracks the performance of global stocks. Unlike mutual funds, indexes are not
investments and do not incur fees or expenses. It is not possible to invest in
an index.
Past performance cannot predict future investment results. Returns and values of
an investment will vary, resulting in a gain or loss on sale. All results shown
assume reinvestment of distributions.
NET ASSET VALUE PER SHARE
AS OF 10/31/99
Class A $15.03
- ----------------------------
Class B $14.82
- -----------------------------
Class C $14.91
- -----------------------------
CAPITAL GAIN DISTRIBUTIONS DECLARED PER SHARE FROM 11/1/98 -- 10/31/99
Class A $0.793
- -----------------------------
Class B $0.693
- -----------------------------
Class C $0.733
- -----------------------------
TOP FIVE SECTOR BREAKDOWNS AS OF 10/31/99
FINANCIAL 21.6%
TECHNOLOGY 17.7%
CONSUMER CYCLICALS 12.0%
COMMUNICATIONS SERVICES 10.5%
CAPITAL GOODS 9.0%
Unlike sectors in the following financial statements which are based upon
standard industrial classifications, sectors on this page are based upon the
Advisor's defined criteria as used in the investment process.
Sector breakdowns are calculated as a percentage of the total equity holdings.
Because the Fund is actively managed, there can be no guarantee the Fund will
continue to hold or invest in these sectors in the future.
<PAGE>
- --------------------------
PORTFOLIO MANAGER'S REPORT
- --------------------------
12-MONTH TOTAL RETURNS FOR THE PERIOD ENDED 10/31/99
WITHOUT WITH SALES
SALES CHARGE CHARGE
- --------------------------------------------
Class A 12.06% 5.62%
- --------------------------------------------
Class B 11.20% 6.20%
- --------------------------------------------
Class C 11.20% 10.20%
- --------------------------------------------
BOUGHT
- --------------------------------------------------------------------------------
We have added cyclical stocks that benefit from global demand such as steel,
paper, oil and related exporting industries. Examples include:
ARACRUZ CELLULOSE
(0.5% of net assets), located in Brazil, is the world's leading producer of
bleached eucalyptus pulp, which is used to manufacture consumer products such as
tissue, high-quality printing, writing and specialty papers.
SCHLUMBERGER LTD.
(1.0% of net assets) provides oil and gas exploration and production services;
manufactures energy, water and communication measurement instruments; and
provides communications and information technology.
SOLD
- --------------------------------------------------------------------------------
To accomplish the asset shift from Europe to Japan and emerging markets, we sold
Jeronimo Martins, Unilever and Valora Holdings.
DEFENSIVE PORTFOLIO HELD BACK PERFORMANCE
In response to turmoil oversees and the threat of recession, we structured the
Fund defensively entering the period. We were heavily invested in more developed
markets, such as Europe, and more defensive sectors, such as telecommunications,
financial and high-quality, large-cap stocks.
INVESTMENT SHIFTED TO U.S., JAPAN AND EMERGING MARKETS
As emerging markets and cyclical industries experienced a strong recovery early
in 1999, the Fund's underweighting in these areas hurt performance. In addition,
the portfolio's overweighting in Europe further hindered performance as European
growth slowed dramatically. We repositioned the portfolio to take advantage of
the current economic environment by increasing the portfolio weightings in the
United States, Japan, South Korea and emerging markets. Those investments were
shifted from Europe, particularly Portugal, Italy, France and Germany. We also
increased sector weightings in technology, capital goods and health care. These
moves helped to strengthen portfolio returns.
As the period progressed, European economic growth picked up in the summer of
1999. The United States economy continued to grow at a healthy rate. Signs of
inflation began to appear, however, dampening performance in telecommunications,
financial, and other sectors sensitive to rising interest rates and in which we
had large investments. Investor sentiment turned away from growth toward
value-driven stocks. In the final months of this fiscal year, U. S. technology
stocks, in which the Fund was underinvested, rose dramatically.
PORTFOLIO ANTICIPATES WORLDWIDE GROWTH
Moving forward, we anticipate strong gross domestic product (GDP) growth
worldwide. This environment should create new global demand, benefiting
exporting companies and markets.
We believe that Europe should continue its strong economic recovery, aided by
lower interest rates and cheaper exports, merger and acquisition activities,
corporate restructurings and continued global economic growth. Japan, despite
the risk of a strong yen, should experience higher consumer demand and strong
benefits from restructuring. Asia should get a boost from this recovery, as well
as from global demand for goods. Korea, Singapore and the Philippines would be
leading beneficiaries. In Latin America, Mexico and Brazil should benefit from
global growth, low inflation, lower interest rates and successful reforms. The
United States should experience continuing growth with low inflation. However,
there is the risk of a hard landing if interest rates rise and cause a market
correction.
/s/ Nicolas Ghajar
Nicolas Ghajar is the portfolio manager of Colonial Global Equity Fund and a
vice president of the Advisor. Prior to managing the Fund, Mr. Ghajar was an
equity analyst of various equity funds since 1992.
Global investing offers significantly long-term growth potential, but also
involves certain risks. The Fund may be affected by political, business and
economic conditions, as well as by currency fluctuations.
TOP FIVE HOLDINGS AS OF 10/31/99
Premark International Inc. 1.5%
- ---------------------------------------
EMC Corp. 1.4%
- ---------------------------------------
KAO Corp. 1.4%
- ---------------------------------------
Wal-Mart Stores 1.4%
- ---------------------------------------
Nippon Telephone & Telegraph 1.3%
- ---------------------------------------
TOP FIVE COUNTRIES AS OF 10/31/99
United States 44.8%
- ---------------------------------------
United Kingdom 12.2%
- ---------------------------------------
Japan 11.4%
- ---------------------------------------
France 5.7%
- ---------------------------------------
Germany 5.4%
- ---------------------------------------
Country breakdowns are calculated as a percentage of total investments.
Portfolio holding breakdowns are calculated as a percentage of net assets.
Because the Fund is actively managed, there can be no guarantee the Fund will
continue to hold these securities or invest in these countries in the future.
HELD
- --------------------------------------------------------------------------------
LUCENT TECHNOLOGIES
(1.1% of net assets), a U.S. company that designs, builds and delivers a wide
range of public and private networks, communications systems, business telephone
systems and microelectronics components.
NOKIA (1.2% of net assets) is an international telecommunications company based
in Finland. As a developer and manufacturer of mobile phones, networks and
systems for cellular and fixed networks, Nokia operates in 45 countries and
sells its products worldwide.
<PAGE>
- -----------------------
PERFORMANCE INFORMATION
- -----------------------
PERFORMANCE OF A $10,000 INVESTMENT IN ALL SHARE CLASSES FROM 6/30/92 - 10/31/99
WITHOUT WITH SALES
SALES CHARGE CHARGE
- ---------------------------------------
Class A $24,707 $23,286
- ---------------------------------------
Class B $23,283 $23,283
- ---------------------------------------
Class C $23,309 $23,309
- ---------------------------------------
PERFORMANCE OF A $10,000 INVESTMENT IN CLASS A SHARES 6/30/92 - 10/31/99
COLONIAL GLOBAL EQUITY FUND VS. THE MORGAN STANLEY INTERNATIONAL
(MSCI) WORLD (GDP) ND INDEX
CGEF Without CGEF With MSCI World (GDP)
Sales Charge Sales Charge Wt ID
------------ ------------ ----------------
06/92 $10,000 $10,000 $10,000
10/92 9,435 8,892 9,596
10/93 12,150 11,451 12,041
10/94 13,334 12,567 12,827
10/95 14,429 13,599 13,810
10/96 16,607 15,652 15,698
10/97 19,749 18,613 18,015
10/98 22,044 20,776 21,029
10/99 24,707 23,286 29,372
AVERAGE ANNUAL TOTAL RETURNS AS OF 10/31/99
<TABLE>
<CAPTION>
Share Class A B C
Inception 6/8/92 6/8/92 8/1/97
- ---------------------------------------------------------------------------------------------
Without With Without With Without With
Sales Sales Sales Sales Sales Sales
Charge Charge Charge Charge Charge Charge
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 year 12.06% 5.62% 11.20% 6.20% 11.20% 10.20%
- ---------------------------------------------------------------------------------------------
5 years 13.13 11.80 12.21 11.96 12.23 12.23
- ---------------------------------------------------------------------------------------------
Life 12.84 11.94 11.93 11.93 11.94 11.94
- ---------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS AS OF 9/30/99
<CAPTION>
Share Class A B C
Without With Without With Without With
Sales Sales Sales Sales Sales Sales
Charge Charge Charge Charge Charge Charge
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 year 16.88% 10.16% 16.02% 11.02% 15.97% 14.97%
- ---------------------------------------------------------------------------------------------
5 years 12.63 11.30 11.73 11.48 11.75 11.75
- ---------------------------------------------------------------------------------------------
Life 12.42 11.51 11.52 11.52 11.53 11.53
- ---------------------------------------------------------------------------------------------
</TABLE>
The Morgan Stanley Capital International (MSCI) World (GDP) ND Index is an
unmanaged index that tracks the performance of global stocks. Unlike mutual
funds, indexes are not investments and do not incur fees or expenses. It is not
possible to invest in an index.
Past performance cannot predict future investment results. Returns and value of
an investment will vary, resulting in a gain or loss on sale. All results shown
assume reinvestment of distributions. The "with sales charge" returns include
the maximum 5.75% charge for Class A shares and the maximum contingent deferred
sales charge (CDSC) of 5% for one year and 2% for five years for Class B shares
and 1% for one year for Class C shares. Performance results reflect any
voluntary waivers or reimbursement of Fund expenses by the Advisor or its
affiliates. Absent these waivers or reimbursement arrangements, performance
results would have been lower.
Performance for different share classes will vary based on differences in share
charges and fees associated with each class.
Class C share performance information includes returns of the Fund's Class B
shares (the oldest existing Fund class with a similar cost structure) for
periods prior to its inception date.
<PAGE>
- --------------------
INVESTMENT PORTFOLIO
- --------------------
October 31, 1999
(In thousands)
COMMON STOCKS - 94.9% COUNTRY SHARES VALUE
- ---------------------------------------------------------------------------
CONSTRUCTION - 1.5%
BUILDING CONSTRUCTION - 1.4%
Centex Corp. 36 $ 976
Daiwa House Industry Co., Ltd. Ja 101 925
--------
1,901
--------
SPECIAL TRADE CONTRACTORS - 0.1%
Tomkins PLC UK 23 76
--------
- ---------------------------------------------------------------------------
FINANCE, INSURANCE & REAL ESTATE - 20.0%
DEPOSITORY INSTITUTIONS - 9.7%
AmSouth Bancorporation 63 1,619
Banque Nationale de Paris Fr 9 779
Banque Nationale de Paris - CVG (a) Fr 4 23
Chase Manhattan Corp. 17 1,468
Commerzbank AG G 15 568
Corporacion Bancaria de Espana SA Sp 27 605
Deutsche Bank AG G 18 1,259
Grupo Financiero Banamex SA (a) Mx 223 559
HSBC Holdings PLC (b) UK 59 732
Lloyds Bank PLC UK 46 629
Standard Chartered Bank PLC UK 39 551
Svenska Handelsbanken Sw 45 630
The Bank of Tokyo Mitsubishi Ja 95 1,577
Union Bank of Switzerland Sz 2 583
Washington Mutual, Inc. 40 1,452
--------
13,034
--------
HOLDING & OTHER INVESTMENT OFFICES - 0.4%
Zurich Allied AG Sz 1 610
--------
INSURANCE CARRIERS - 3.7%
Allstate Corp. 35 1,000
American International Group, Inc. 14 1,480
AXA Fr 7 1,047
International Nederlanden Groep Ne 18 1,065
Storebrand ASA No 53 368
--------
4,960
--------
INVESTMENT COMPANIES - 4.0%
Henderson Japanese Smaller Companies Trust PLC (a) UK 1,331 1,576
Irish Investment Fund, Inc. Ir 46 760
Korea Fund, Inc. Ko 49 630
Taiwan Fund, Inc. Tw 44 793
Thai Fund, Inc. Th 66 519
World Equity Benchmark Share - Japan Ja 78 1,156
--------
5,434
--------
NONDEPOSITORY CREDIT INSTITUTIONS - 2.2%
Associates First Capital Corp. 37 1,332
Cheung Kong (Holdings) Ltd. HK 64 581
New World Development Co., Ltd. HK 116 219
Nichiei Co., Ltd. Ja 4 182
Promise Co., Ltd. Ja 10 672
--------
2,986
--------
- ---------------------------------------------------------------------------
MANUFACTURING - 45.9%
CHEMICALS & ALLIED PRODUCTS - 9.7%
Akzo Nobel NV Ne 13 574
BASF AG G 16 724
Clorox Co. 23 $ 950
E.I. DuPont De Nemours & Co. 13 831
Glaxo Holdings PLC UK 29 857
Kao Corp. Ja 60 1,833
Merck & Co., Inc. 20 1,559
Novartis Sz (c) 602
Pharmacia & Upjohn, Inc. 27 1,429
Rhone Poulenc, Class A Fr 14 802
Schering-Plough Corp. 29 1,416
Warner-Lambert Co. 19 1,516
--------
13,093
--------
COMMUNICATIONS EQUIPMENT - 4.2%
LM Ericsson ADR Sw 20 833
Lucent Technologies, Inc. 24 1,523
Philips Electronics NV Ne 8 823
Racal Electronics PLC UK 133 984
Sony Corp. Ja 10 1,562
--------
5,725
--------
ELECTRICAL INDUSTRIAL EQUIPMENT - 1.2%
General Electric Co. 12 1,640
--------
ELECTRONIC COMPONENTS - 2.3%
Alcatel Alsthom (Cie Gen El) Fr 4 563
Murata Manufacturing Co., Ltd. Ja 10 1,287
Texas Instruments, Inc. 15 1,328
--------
3,178
--------
FOOD & KINDRED PRODUCTS - 2.1%
Bass PLC UK 52 576
Diageo PLC UK 25 251
Groupe Danone Fr 3 678
PepsiCo, Inc. 37 1,273
--------
2,778
--------
FURNITURE & FIXTURES - 0.8%
Furniture Brands International, Inc. (a) 54 1,039
--------
HOUSEHOLD APPLIANCES - 0.5%
Electrolux AB, Series B Sw 34 680
--------
MACHINERY & COMPUTER EQUIPMENT - 7.1%
Canon, Inc. Ja 39 1,105
Cisco Systems, Inc. (a) 18 1,340
EMC Corp. (a) 27 1,956
Hewlett-Packard Co. 12 896
Hitachi Ltd. Ja 83 898
International Business Machines Corp. 14 1,397
Invensys PLC UK 161 783
Mannesmann AG G 8 1,238
--------
9,613
--------
MEASURING & ANALYZING INSTRUMENTS - 0.4%
Fuji Photo Film Co., Ltd. Ja 17 547
--------
PAPER PRODUCTS - 1.6%
Aracruz Celulose SA ADR Bz 32 664
Fort James Corp. 33 866
Royal Koninklijke PTT Nederland NV Ne 7 371
TNT Post Group NV Ne 9 227
--------
2,128
--------
PETROLEUM REFINING - 3.3%
Amerada Hess Corp. 17 947
BP Amoco PLC ADR UK 14 808
Compagnie Francaise de Petroleum Total B Fr 5 626
ENI It 95 557
Royal Dutch Petroleum Co. Ne 8 474
Texaco, Inc. 16 1,007
--------
4,419
--------
PRIMARY METAL - 1.5%
Acerinox SA Sp 32 963
Pirelli SPA It 188 433
Pohang Iron & Steel Co. Ltd. 17 574
--------
1,970
--------
PRINTING & PUBLISHING - 0.3%
Mondadori (Arnoldo) Editore SPA It 19 348
--------
RUBBER & PLASTIC - 1.5%
Premark International, Inc. 36 1,976
--------
STONE, CLAY, GLASS & CONCRETE - 1.9%
Cemex SA Mx 127 574
Hanson PLC UK 91 699
Holderbank Financiere Glaris AG Sz 1 648
Lafarge SA Fr 7 660
--------
2,581
--------
TOBACCO PRODUCTS - 0.5%
Allied Zurich PLC UK 35 417
B.A.T. Industries PLC UK 35 230
--------
647
--------
TRANSPORTATION EQUIPMENT - 7.0%
DaimlerChrysler AG G 10 742
Dana Corp. 24 712
Ford Motor Co. 28 1,531
General Dynamics Corp. 18 987
GKN PLC UK 57 916
Honda Motor Co. Ltd. Ja 27 1,141
MAN AG G 36 1,200
Textron, Inc. 13 980
United Technologies Corp. 21 1,289
--------
9,498
--------
- ---------------------------------------------------------------------------
MINING & ENERGY - 1.7%
CRUDE PETROLEUM & NATURAL GAS - 0.5%
Conoco, Inc., Class B 27 736
--------
OIL & GAS FIELD SERVICES - 1.2%
Petroleum Geo-Services (a) No 22 324
Schlumberger Ltd. 22 1,351
--------
1,675
--------
- ---------------------------------------------------------------------------
RETAIL TRADE - 4.2%
APPAREL & ACCESSORY STORES - 0.8%
Hennes & Mauritz AB (a) Sw 40 1,055
--------
FOOD STORES - 1.7%
Safeway, Inc. (a) 27 964
Tesco PLC UK 202 609
Vendex International NV Ne 27 787
--------
2,360
--------
GENERAL MERCHANDISE STORES - 1.4%
Wal-Mart Stores, Inc. 32 $ 1,828
--------
MISCELLANEOUS RETAIL - 0.3%
Imasco Ltd. Ca 16 438
--------
- ---------------------------------------------------------------------------
SERVICES - 5.5%
AMUSEMENT & RECREATION - 0.3%
Hilton Group PLC UK 137 429
--------
COMPUTER RELATED SERVICES - 0.9%
Cap Gemini SA Fr 8 1,191
--------
COMPUTER SOFTWARE - 4.1%
Compuware Corp. (a) 40 1,118
Microsoft Corp. (a) 7 17 1,592
Misys PLC UK 64 534
Momentum Business Applications, Inc. (a) (c) 2
SAP AG G 3 1,248
SunGard Data Systems, Inc. (a) 41 992
--------
5,486
--------
HOTELS, CAMPS & LODGING - 0.2%
Accor SA Fr 1 312
--------
- ---------------------------------------------------------------------------
TRANSPORTATION, COMMUNICATIONS, ELECTRIC,
GAS AND SANITARY SERVICES - 16.1%
COMMUNICATIONS - 1.8%
Viacom, Inc., Class B (a) 28 1,253
Vodafone Group PLC UK 260 1,192
--------
2,445
--------
ELECTRIC SERVICES - 1.8%
Empresa Nacional De Electricidad Sp 26 514
Korea Electric Power Corp., ADR Ko 36 561
Texas Utilities Co. 36 1,379
--------
2,454
--------
GAS SERVICES - 1.6%
BG PLC UK 115 624
NICOR, Inc. 41 1,585
--------
2,209
--------
MOTOR FREIGHT & WAREHOUSING - 0.9%
CNF Transportation 36 1,184
--------
TELECOMMUNICATIONS - 10.0%
Bell Atlantic Corp. 23 1,520
British Telecommunications PLC UK 39 708
COLT Telecom Group PLC (a) UK 48 1,447
France Telecom SA Fr 6 584
Hong Kong Telecommunications Ltd. (b) HK 244 555
MCI WorldCom, Inc. (a) 17 1,433
Nippon Telegraph & Telephone Corp. Ja (c) 1,690
Nokia Oyj, Class A Fi 14 1,607
Telebras Sponsored ADR Bz 12 935
Telecel-Comunicacaoes Pessoais, SA Pt 3 364
Telecom Italia SPA It 52 454
Telecomunicacoes Brasileiras SA ADR (a) Bz 6 (c)
Telefonica de Espana Sp 26 1,298
Telmex Mx 198 842
--------
13,437
--------
TOTAL COMMON STOCKS (cost of $105,197)(d) 128,100
--------
SHORT-TERM OBLIGATIONS - 6.9% PAR VALUE
- ---------------------------------------------------------------------------
Repurchase agreement with Lehman Brothers, Inc.,
dated 10/29/99, due 11/01/99 at 5.220%,
collateralized by U.S. Treasury bonds and/or
notes with various maturities to 2009, market
value $9,520 (repurchase proceeds $9,292). $9,288 $ 9,288
--------
- ---------------------------------------------------------------------------
OTHER ASSETS & LIABILITIES - (1.8)% (2,460)
- ---------------------------------------------------------------------------
NET ASSETS - 100.0% $134,928
========
NOTES TO INVESTMENT
- ---------------------------------------------------------------------------
(a) Non-income producing.
(b) The value of this security represents fair value as
determined in good faith under direction of the Trustees.
(c) Rounds to less than one.
(d) Cost for federal income tax purposes is $105,778.
SUMMARY OF SECURITIES
BY COUNTRY COUNTRY VALUE % OF TOTAL
- ----------------------------------------------------------------------------
United States $57,226 44.8
United Kingdom UK 15,628 12.2
Japan Ja 14,575 11.4
France Fr 7,265 5.7
Germany G 6,979 5.4
Netherlands Ne 4,321 3.4
Spain Sp 3,380 2.6
Sweden Sw 3,198 2.5
Switzerland Sz 2,443 1.9
Mexico Mx 1,975 1.5
Italy It 1,792 1.4
Finland Fi 1,607 1.3
Brazil Bz 1,599 1.2
Hong Kong HK 1,355 1.1
Korea Ko 1,191 0.9
Taiwan Tw 793 0.6
Ireland Ir 760 0.6
Norway No 692 0.5
Thailand Th 519 0.4
Canada Ca 438 0.3
Portugal Pt 364 0.3
-------- -----
$128,100 100.0
======== =====
Certain securities are listed by country of underlying exposure but may trade
predominantly on other exchanges.
ACRONYM NAME
- -------------------------------------------------------------
ADR American Depositary Receipt
See notes to financial statements.
<PAGE>
- -----------------------------------
STATEMENT OF ASSETS AND LIABILITIES
- -----------------------------------
October 31, 1999
(In thousands except for per share amounts and footnotes)
ASSETS
Investments at value (cost $105,197) $128,100
Short-term obligations 9,288
--------
137,388
Receivable for:
Fund shares sold 754
Dividends 173
Foreign tax reclaims 47
Interest 4
Expense reimbursement due from Advisor 28
Other 5
--------
1,011
--------
Total assets 138,399
LIABILITIES
Payable for:
Fund shares repurchased 3,270
Management fee 102
Bookkeeping fee 5
Transfer Agent fee 25
Deferred Trustees fees 4
Other 65
--------
Total liabilities 3,471
--------
Net Assets $134,928
========
Net asset value and redemption price per share --
Class A ($53,905/3,587) $ 15.03(a)
--------
Maximum offering price per share --
Class A ($15.03/0.9425) $ 15.95(b)
--------
Net asset value and offering price per share --
Class B ($78,682/5,309) $ 14.82(a)
--------
Net asset value and offering price per share --
Class C ($2,341/157) $ 14.91(a)
--------
(a) Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
(b) On sales of $50,000 or more the offering price is reduced.
See notes to financial statements.
<PAGE>
- -----------------------
STATEMENT OF OPERATIONS
- -----------------------
For the Year Ended October 31, 1999
(In thousands)
INVESTMENT INCOME
Dividends $ 1,882
Interest 273
---------
Total investment income (net of nonreclaimable
foreign taxes withheld at source which
amounted to $140) 2,155
EXPENSES
Management fee 1,281
Service fee 338
Distribution fee -- Class B 616
Distribution fee -- Class C 16
Transfer agent 442
Bookkeeping fee 57
Trustees fee 12
Custodian fee 71
Audit fee 49
Legal fee 9
Registration fee 44
Reports to shareholders 17
Other 44
---------
2,996
Fees and expenses waived by the Advisor (141)
---------
2,855
---------
Net Investment Loss (700)
---------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
PORTFOLIO POSITIONS
Net realized gain (loss) on:
Investments 4,686
Foreign currency transactions (30)
---------
Net Realized Gain 4,656
Net change in unrealized appreciation/depreciation
during the period on:
Investments 11,099
Foreign currency transactions (24)
---------
11,075
---------
Net Gain 15,731
---------
INCREASE IN NET ASSETS FROM OPERATIONS $ 15,031
---------
See notes to financial statements.
<PAGE>
- ----------------------------------
STATEMENT OF CHANGES IN NET ASSETS
- ----------------------------------
(In thousands)
<TABLE>
<CAPTION>
YEARS ENDED OCTOBER 31
----------------------------------
INCREASE (DECREASE) IN NET ASSETS 1999 1998
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS
Net investment income (loss) $ (700) $ 49
Net realized gain 4,656 10,072
Net change in unrealized appreciation/depreciation 11,075 559
--------- ---------
Net increase from operations 15,031 10,680
DISTRIBUTIONS
From net investment income -- Class A -- (241)
In excess of net investment income -- Class A -- (155)
From net realized gains -- Class A (2,535) (3,875)
From net investment income -- Class B -- (99)
In excess of net investment income -- Class B -- (63)
From net realized gains -- Class B (3,927) (7,785)
From net investment income -- Class C -- (3)
In excess of net investment income -- Class C -- (2)
From net realized gains -- Class C (100) (97)
--------- ---------
8,469 (1,640)
--------- ---------
FUND SHARE TRANSACTIONS
Receipts for shares sold -- Class A 145,596 42,663
Value of distributions reinvested -- Class A 2,378 3,967
Cost of shares repurchased -- Class A (144,070) (35,088)
--------- ---------
3,904 11,542
--------- ---------
Receipts for shares sold -- Class B 19,810 29,295
Value of distributions reinvested -- Class B 3,597 7,331
Cost of shares repurchased -- Class B (28,092) (29,964)
--------- ---------
(4,685) 6,662
--------- ---------
Receipts for shares sold -- Class C 1,076 2,404
Value of distributions reinvested -- Class C 96 97
Cost of shares repurchased -- Class C (875) (1,230)
--------- ---------
297 1,271
--------- ---------
Net increase (decrease) from fund share transactions (484) 19,475
--------- ---------
Total increase 7,985 17,835
NET ASSETS
Beginning of period 126,943 109,108
--------- ---------
End of period (net of overdistributed net investment income
of $433 and $346, respectively) $ 134,928 $ 126,943
========= =========
NUMBER OF FUND SHARES
Sold -- Class A 9,949 3,003
Issued for distributions reinvested -- Class A 167 296
Repurchased -- Class A (9,803) (2,489)
--------- ---------
313 810
--------- ---------
Sold -- Class B 1,365 2,007
Issued for distributions reinvested -- Class B 254 555
Repurchased -- Class B (1,936) (2,117)
--------- ---------
(317) 445
--------- ---------
Sold -- Class C 73 163
Issued for distributions reinvested -- Class C 7 7
Repurchased -- Class C (60) (85)
--------- ---------
20 85
--------- ---------
</TABLE>
See notes to financial statements.
<PAGE>
- -----------------------------
NOTES TO FINANCIAL STATEMENTS
- -----------------------------
October 31, 1999
NOTE 1. ACCOUNTING POLICIES
ORGANIZATION
Colonial Global Equity Fund (the Fund), a series of Liberty Funds Trust III,
(formerly Colonial Trust III), is a diversified portfolio of a Massachusetts
business trust, registered under the Investment Company Act of 1940, as amended,
as an open-end management investment company. The Fund's investment objective is
to seek long-term growth by investing primarily in global equities. The Fund may
issue an unlimited number of shares. The Fund offers three classes of shares:
Class A, Class B and Class C. Class A shares are sold with a front-end sales
charge and a 1.00% contingent deferred sales charge on redemptions made within
eighteen months on an original purchase of $1 million to $5 million. Class B
shares are subject to an annual distribution fee and a contingent deferred sales
charge. Class B shares will convert to Class A shares when they have been
outstanding approximately eight years. Class C shares are subject to a
contingent deferred sales charge on redemptions made within one year after
purchase and an annual distribution fee.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates. The following is a summary of
significant accounting policies consistently followed by the Fund in the
preparation of its financial statements.
SECURITY VALUATION AND TRANSACTIONS
Equity securities generally are valued at the last sale price or, in the case of
unlisted or listed securities for which there were no sales during the day, at
current quoted bid prices.
Forward currency contracts are valued based on the weighted value of the
exchange traded contracts with similar durations.
Short-term obligations with a maturity of 60 days or less are valued at
amortized cost.
The value of all assets and liabilities quoted in foreign currencies are
translated into U.S. dollars at that day's exchange rates.
Portfolio positions for which market quotations are not readily available are
valued at fair value under procedures approved by the Trustees.
Security transactions are accounted for on the date the securities are
purchased, sold or mature.
Cost is determined and gains (losses) are based upon the specific identification
method for both financial statement and federal income tax purposes.
DETERMINATION OF CLASS NET ASSET VALUES AND FINANCIAL HIGHLIGHTS
All income, expenses (other than the Class B and Class C distribution fees) and
realized and unrealized gains (losses) are allocated to each class
proportionately on a daily basis for purposes of determining the net asset value
of each class.
The per share data was calculated using average shares outstanding during the
period. In addition, Class B and Class C net investment income per share data
reflects the distribution fee applicable to Class B and Class C shares only.
Class B and Class C ratios are calculated by adjusting the expense and net
investment income per share data and ratios for the Fund for the entire period
by the distribution fee applicable to Class B and Class C shares only.
FEDERAL INCOME TAXES
Consistent with the Fund's policy to qualify as a regulated investment company
and to distribute all of its taxable income, no federal income tax has been
accrued.
INTEREST INCOME, DEBT DISCOUNT AND PREMIUM
Interest income is recorded on the accrual basis. Original issue discount is
accreted to interest income over the life of a security with a corresponding
increase in the cost basis; premium and market discount are not amortized or
accreted.
DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded on the ex-date.
The amount and character of income and gains to be distributed are determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles. Reclassifications are made to the Fund's capital accounts
to reflect income and gains available for distribution (or available capital
loss carryforwards) under income tax regulations.
FOREIGN CURRENCY TRANSACTIONS
Net realized and unrealized gains (losses) on foreign currency transactions
includes gains (losses) arising from the fluctuations in exchange rates between
trade and settlement dates on securities transactions, gains (losses) arising
from the disposition of foreign currency, and currency gains (losses) between
the accrual and payment dates on dividends and interest income and foreign
withholding taxes.
The Fund does not distinguish that portion of gains (losses) on investments
which is due to changes in foreign exchange rates from that which is due to
changes in market prices of the investments. Such fluctuations are included with
the net realized and unrealized gains (losses) on investments.
FORWARD CURRENCY CONTRACTS
The Fund may enter into forward currency contracts to purchase or sell foreign
currencies at predetermined exchange rates in connection with the settlement of
purchases and sales of securities. The Fund may also enter into forward currency
contracts to hedge certain other foreign currency denominated assets. The
contracts are used to minimize the exposure to foreign exchange rate
fluctuations during the period between trade and settlement date of the
contracts. All contracts are marked-to-market daily, resulting in unrealized
gains (losses) which become realized at the time the forward currency contracts
are closed or mature. Realized and unrealized gains (losses) arising from such
transactions are included in net realized and unrealized gains (losses) on
foreign currency transactions. Forward currency contracts do not eliminate
fluctuations in the prices of the Fund's portfolio securities. While the maximum
potential loss from such contracts is the aggregate face value in U.S. dollars
at the time the contract was opened, exposure is typically limited to the change
in value of the contract (in U.S. dollars) over the period it remains open.
Risks may also arise if counterparties fail to perform their obligations under
the contracts.
OTHER
Corporate actions are recorded on ex-date (except for certain foreign securities
which are recorded as soon after ex-date as the Fund becomes aware of such), net
of nonrebatable tax withholdings. Where a high level of uncertainty as to
collection exists, income on securities is recorded net of all tax withholdings
with any rebates recorded when received.
The Fund's custodian takes possession through the federal book-entry system of
securities collateralizing repurchase agreements. Collateral is marked-to-
market daily to ensure that the market value of the underlying assets remains
sufficient to protect the Fund. The Fund may experience costs and delays in
liquidating the collateral if the issuer defaults or enters bankruptcy.
NOTE 2. FEES AND COMPENSATION PAID TO AFFILIATES
MANAGEMENT FEE
Colonial Management Associates, Inc. (the Advisor) is the investment Advisor of
the Fund and furnishes accounting and other services and office facilities for a
monthly fee equal to 0.95% annually of the Fund's average net assets.
BOOKKEEPING FEE
The Advisor provides bookkeeping and pricing services for $27,000 annually plus
0.035% annually of the Fund's average net assets over $50 million.
TRANSFER AGENT
Liberty Funds Services, Inc., (the Transfer Agent), provides shareholder
services for a monthly fee equal to 0.236% annually of the Fund's average net
assets and receives reimbursement for certain out of pocket expenses.
UNDERWRITING DISCOUNTS, SERVICE AND DISTRIBUTION FEES
Liberty Funds Distributor, Inc., (the Distributor), a subsidiary of the Advisor,
is the Fund's principal underwriter. For the year ended October 31, 1999, the
Fund has been advised that the Distributor retained net underwriting discounts
of $127,240 on sales of the Fund's Class A shares and received contingent
deferred sales charges (CDSC) of $7,738, $270,938, and $1,641 on Class A, Class
B, and Class C share redemptions, respectively.
The Fund has adopted a 12b-1 plan which requires the payment of a service fee to
the Distributor equal to 0.25% annually of the Fund's net assets as of the 20th
of each month. The plan also requires the payment of a distribution fee to the
Distributor equal to 0.75% annually of the average net assets attributable to
Class B and Class C shares only.
The CDSC and the fees received from the 12b-1 plan are used principally as
repayment to the Distributor for amounts paid by the Distributor to dealers who
sold such shares.
EXPENSE LIMITS
The Advisor has agreed, until further notice, to waive fees and bear certain
Fund expenses to the extent that total expenses (exclusive of service and
distribution fees, brokerage commissions, interest, taxes and extraordinary
expenses, if any) exceed 1.40% annually of the Fund's average net assets.
OTHER
The Fund pays no compensation to its officers, all of whom are employees of the
Advisor.
The Fund's Trustees may participate in a deferred compensation plan which may be
terminated at any time. Obligations of the plan will be paid solely out of the
Fund's assets.
NOTE 3. PORTFOLIO INFORMATION
INVESTMENT ACTIVITY
For the year ended October 31, 1999, purchases and sales of investments, other
than short term obligations, were $83,268,458 and $92,766,870, respectively.
Unrealized appreciation (depreciation) at October 31, 1999, based on cost of
investments for federal income tax purposes was:
Gross unrealized appreciation $28,702,587
Gross unrealized depreciation (6,381,001)
-----------
Net unrealized appreciation $22,321,586
===========
OTHER
There are certain additional risks involved when investing in foreign securities
that are not inherent with investments in domestic securities. These risks may
involve foreign currency exchange rate fluctuations, adverse political and
economic developments and the possible prevention of foreign currency exchange
or the imposition of other foreign governmental laws or restrictions.
The Fund may focus its investments in certain industries, subjecting it to
greater risk than a fund that is more diversified.
NOTE 4. LINE OF CREDIT
The Fund may borrow up to 33 1/3% of its net assets under a line of credit for
temporary or emergency purposes. Any borrowings bear interest at one of the
following options determined at the inception of the loan: (1) federal funds
rate plus 1/2 of 1%, (2) the lending bank's base rate or (3) IBOR offshore loan
rate plus 1/2 of 1%. There were no borrowings under the line of credit during
the year ended October 31, 1999.
NOTE 5. COMPOSITION OF NET ASSETS
At October 31, 1999, net assets consisted of:
Capital paid in $109,744
Overdistributed net investment income (433)
Accumulated net realized gain 2,726
Net unrealized appreciation (depreciation) on:
Investments 22,903
Foreign currency transactions (12)
--------
$134,928
--------
<PAGE>
- --------------------
FINANCIAL HIGHLIGHTS
- --------------------
Selected data for a share of each class outstanding
throughout each period are as follows:
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31, 1999
--------------------------------------------------------
CLASS A CLASS B CLASS C
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.160 $ 13.980 $ 14.100
--------- --------- ---------
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (a)(b) (0.008) (0.117) (0.117)
Net realized and unrealized gain 1.671 1.650 1.660
--------- --------- ---------
Total from Investment Operations 1.663 1.533 1.543
--------- --------- ---------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net realized gains (0.793) (0.693) (0.733)
--------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 15.030 $ 14.820 $ 14.910
--------- --------- ---------
Total return (c)(d) 12.06% 11.20% 11.20%
--------- --------- ---------
RATIOS TO AVERAGE NET ASSETS
Expenses (e) 1.65% 2.40% 2.40%
Fees and expenses waived by the Advisor (e) 0.10% 0.10% 0.10%
Net investment loss (e) (0.05)% (0.80)% (0.80)%
Portfolio turnover 65% 65% 65%
Net assets at end of period (000) $ 53,905 $ 78,682 $ 2,341
(a) Net of fees and expenses waived or borne
by the Advisor which amounted to: $ 0.015 $ 0.015 $ 0.015
(b) Per share data was calculated using average shares outstanding during the period.
(c) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent
deferred sales charge.
(d) Had the Advisor not waived or reimbursed a portion of expenses, total return would have been reduced.
(e) The benefits derived from custody credits and directed brokerage arrangements had no impact.
</TABLE>
- ------------------------------------------------------------------------------
FEDERAL INCOME TAX INFORMATION (UNAUDITED)
For the fiscal year ended October 31, 1999, the Fund designates long-term
capital gains of $4,359,771.
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED
YEAR ENDED OCTOBER 31, 1998 YEAR ENDED OCTOBER 31, 1997 OCTOBER 31, 1996
------------------------------- --------------------------------- -------------------
CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C(c) CLASS A CLASS B
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $14.280 $14.130 $14.260 $13.440 $13.350 $ 15.390 $12.450 $12.390
------- ------- ------- ------- ------- -------- ------- -------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income
(loss)(a)(b) 0.075 (0.032) (0.033) 0.169 0.065 (0.025) 0.123 0.027
Net realized and unrealized
gain (loss) 1.478 1.444 1.474 2.179 2.158 (1.105)(d) 1.664 1.634
------- ------- ------- ------- ------- -------- ------- -------
Total from Investment
Operations 1.553 1.412 1.441 2.348 2.223 (1.130) 1.787 1.661
------- ------- ------- ------- ------- -------- ------- -------
LESS DISTRIBUTIONS DECLARED
TO SHAREHOLDERS
From net investment income (0.087) (0.020) (0.043) (0.065) -- -- (0.098) (0.027)
In excess of investment income (0.056) (0.012) (0.028) -- -- -- (0.035) (0.010)
From net realized gains (1.530) (1.530) (1.530) (1.443) (1.443) -- (0.664) (0.664)
------- ------- ------- ------- ------- -------- ------- -------
Total Distributions Declared
to Shareholders (1.673) (1.562) (1.601) (1.508) (1.443) -- (0.797) (0.701)
------- ------- ------- ------- ------- -------- ------- -------
NET ASSET VALUE, END OF PERIOD $14.160 $13.980 $14.100 $14.280 $14.130 $ 14.260 $13.440 $13.350
------- ------- ------- ------- ------- -------- ------- -------
Total return(e)(f) 11.62% 10.64% 10.77% 18.92% 18.02% (7.34)%(g) 15.10% 14.04%
------- ------- ------- ------- ------- -------- ------- -------
RATIOS TO AVERAGE NET ASSETS
Expenses (h) 1.65% 2.40% 2.40% 1.58% 2.33% 2.44%(i) 1.58% 2.33%
Fees and expenses waived or borne
by Advisor (h) 0.11% 0.11% 0.11% -- -- -- -- --
Net investment income (loss)(h) 0.53% (0.22)% (0.22)% 1.22% 0.47% (0.68)%(i) 0.96% 0.21%
Portfolio turnover 42% 42% 42% 90% 90% 90% 125% 125%
Net assets at end of period (000) $46,344 $78,668 $ 1,931 $35,181 $73,188 $ 739 $19,092 $65,714
(a) Net of fees and expenses
wavied or borne by the
Advisor which amounted to: $ 0.015 $ 0.015 $ 0.015 -- -- -- -- --
(b) Per share data was calculated using average shares outstanding during the period.
(c) Class C shares were inititally offered on August 1, 1997. Per share amounts reflect activity from that date.
(d) The amount shown for a share outstanding does not correspond with the aggregate net gain on investments for the period due to
the timing of sales and repurchases of fund shares in relation to fluctuating market values of the investments of the Fund.
(e) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred
sales charge.
(f) Had the Advisor not waived or reimbursed a portion of expenses, total return would have been reduced.
(g) Not annualized.
(h) The benefits derived from custody credits and directed brokerage arrangements had no impact.
(i) Annualized.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31, 1995
------------------------------
CLASS A CLASS B
- ------------------------------------------------------------------------------------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.690 $ 12.630
--------- ---------
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a)(b) 0.167 0.076
Net realized and unrealized gain 0.735 0.735
--------- ---------
Total from Investment Operations 0.902 0.811
--------- ---------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income (0.198) (0.107)
From net realized gains (0.944) (0.944)
--------- ---------
Total Distributions Declared to Shareholders (1.142) (1.051)
--------- ---------
NET ASSET VALUE, END OF PERIOD $ 12.450 $ 12.390
--------- ---------
Total return (c)(d) 8.23% 7.43%
--------- ---------
RATIOS TO AVERAGE NET ASSETS
Expenses(e) 1.36% 2.11%
Fees and expenses waived or borne by Advisor(e) 0.26% 0.26%
Net investment income(e) 1.40% 0.65%
Portfolio turnover 74% 74%
Net assets at end of period (000) $ 11,501 $ 59,131
(a) Net of fees and expenses waived or borne by the
Advisor which amounted to: $ 0.031 $ 0.031
(b) Per share data was calculated using average shares outstanding during the period.
(c) Total return at net asset value assuming all distributions reinvested and no initial sales
charge or contingent deferred sales charge.
(d) Had the Advisor not waived or reimbursed a portion of expenses, total return would have been reduced.
(e) The benefits derived from custody credits and directed brokerage arrangements had no impact. Prior
years' ratios are net of benefits received, if any.
</TABLE>
<PAGE>
- ---------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
- ---------------------------------
TO THE TRUSTEES OF LIBERTY FUNDS TRUST III AND THE SHAREHOLDERS OF COLONIAL
GLOBAL EQUITY FUND
In our opinion, the accompanying statement of assets and liabilities, including
the investment portfolio, and the related statements of operations, changes in
net assets and the financial highlights present fairly, in all material
respects, the financial position of Colonial Global Equity Fund (a series of
Liberty Funds Trust III, formerly Colonial Trust III) at October 31, 1999, the
results of its operations, the changes in its net assets and the financial
highlights for the periods indicated, in conformity with generally accepted
accounting principles. These financial statements and the financial highlights
(hereafter referred to as "financial statements") are the responsibility of the
Fund's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of portfolio positions at October 31, 1999 by correspondence with
the custodian, provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Boston, Massachusetts
December 13, 1999
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
TRUSTEES & TRANSFER AGENT
<TABLE>
- ---------------------------------------------------------------------------------------
<S> <C>
ROBERT J. BIRNBAUM WILLIAM E. MAYER
Consultant (formerly Special Counsel, Partner, Development Capital, LLC
Dechert, Price & Rhoads; President and (formerly Dean, College of Business and
Chief Operating Officer, New York Stock Management, University of Maryland;
Exchange, Inc.; President, American Dean, Simon Graduate School of Business,
Stock Exchange Inc.) University of Rochester; Chairman and
Chief Executive Officer, CS First Boston
TOM BLEASDALE Merchant Bank; and President and Chief
Retired (formerly Chairman of the Board Executive Officer, The First Boston
and Chief Executive Officer, Shore Bank Corporation)
& Trust Company)
JAMES L. MOODY, JR.
JOHN V. CARBERRY Retired (formerly Chairman of the Board,
Senior Vice President of Liberty Chief Executive Officer and Director
Financial Companies, Inc. (formerly Hannaford Bros. Co.)
Managing Director, Salomon Brothers)
JOHN J. NEUHAUSER
LORA S. COLLINS Academic Vice President and Dean of
Attorney (formerly Attorney, Kramer, Faculties, Boston College (former Dean,
Levin, Naftalis & Frankel) Boston College School of Management)
JAMES E. GRINNELL THOMAS E. STITZEL
Private Investor (formerly Senior Vice Professor of Finance, College of
President-Operations, The Rockport Business, Boise State University;
Company) Business Consultant and Author
RICHARD W. LOWRY ROBERT L. SULLIVAN
Private Investor (formerly Chairman and Retired Partner, KPMG LLP (formerly
Chief Executive Officer, U.S. Plywood Management Consultant, Saatchi and
Corporation) Saatchi Consulting Ltd. and Principal
and International Practice Director,
SALVATORE MACERA Management Consulting, Peat Marwick Main
Private Investor (formerly Executive & Co.)
Vice President of Itek Corp. and
President of Itek Optical & Electronic ANNE-LEE VERVILLE
Industries, Inc.) Consultant (formerly General Manager,
Global Education Industry, and
President, Applications Solutions
Division, IBM Corporation)
</TABLE>
- -------------------------------------------------------------------------------
IMPORTANT INFORMATION ABOUT THIS REPORT
The Transfer Agent for Colonial Global Equity Fund is:
Liberty Funds Services, Inc.
P.O. Box 1722
Boston, MA 02105-1722
1-800-345-6611
The Fund mails one shareholder report to each shareholder address. If you would
like more than one report, please call 1-800-426-3750 and additional reports
will be sent to you.
This report has been prepared for shareholders of Colonial Global Equity Fund.
This report may also be used as sales literature when preceded or accompanied by
the current prospectus which provides details of sales charges, investment
objectives and operating policies of the Fund and with the most recent copy of
the Liberty Funds Distributor, Inc. Performance Update.
ANNUAL REPORT:
COLONIAL GLOBAL EQUITY FUND
<PAGE>
Liberty offers the independent thinking and collective strength of six financial
specialists. Our distinguished product line helps financial advisors and their
clients build diversified investment portfolios for long-term financial goals.
- --------------------------------------------------------------------------------
L I B E R T Y
- ---------------
F U N D S
- --------------------------------------------------------------------------------
ALL-STAR Institutional money management approach for individual investors.
COLONIAL Fixed-income and value style equity investing.
CRABBE
HUSON A contrarian approach to fixed-income and equity investing.
NEWPORT A leader in international investing.
STEIN ROE Growth style equity investing.
ADVISOR
[graphic omitted]
KEYPORT A leading provider of innovative annuity products.
Liberty's mutual funds are offered by prospectus through Liberty Funds
Distributor, Inc.
BEFORE YOU INVEST, CONSULT YOUR FINANCIAL ADVISOR.
Your financial advisor can help you develop a long-term plan for reaching your
financial goals.
- -------------------------------------------
COLONIAL GLOBAL EQUITY FUND ANNUAL REPORT
- -------------------------------------------
[Graphic
Omitted] L I B E R T Y
-----------------
F U N D S
ALL-STAR o COLONIAL o CRABBE HUSON o NEWPORT o STEIN ROE ADVISOR
Liberty Funds Distributor, Inc. (C)1999
One Financial Center, Boston, MA 02111-2621, 1-800-426-3750
www.libertyfunds.com
GE-02/083I-1099 (12/99) 99/1537
